On the first day of trading in May, the S&P 500 (SPY) opened at 4,191. Today, we closed at 4,195. In fact, we’ve pretty much gone sideways since mid-April. Yes, we are still in a choppy market environment. As discussed in previous commentaries, this is not the time to be aggressive. This is a time to prioritize risk management and maintaining our financial, emotional, and mental capital. At some point, market conditions will improve, and we will start to trend higher. This is when we will get aggressive. Patience pays. Especially in markets. And especially in today’s dopamine-addicted world where any type of craving can be fulfilled with a few taps on your phone screen. In today’s commentary, I will talk about some higher-level strategy, opportunities on the horizon and updates on the market outlook. Read on below to find out more….(Please enjoy this updated version of my weekly commentary from the POWR Growth newsletter).
One of my favorite books that I reread at least once a year is Reminiscences of a Stock Operator. The book is a compilation of the learnings of famed speculator Jesse Livermore who managed to build and destroy multiple fortunes. Despite the book being nearly a century old, it contains multiple lessons that remain applicable today.
The one that really resonates is the importance of patience. Livermore talked about how his worst decisions came when he was “eager for action”, and his best trades came after long periods of inaction.